Central Nat. Bank of Miami v. Central Bancorp., Inc.

• Court: Florida District Court of Appeals
• Writing for the Court: FERGUSON
• Citation: Central Nat. Bank of Miami v. Central Bancorp., Inc., 411 So.2d 358 (Fla. App. 1982)
• Decision Date: 30 March 1982
• Docket Number: No. 81-958,81-958
• Parties: CENTRAL NATIONAL BANK OF MIAMI, Appellant, v. CENTRAL BANCORP., INC., a Florida corporation, Central Bank and Trust Company,a Florida State Banking Institution, and Central Bank of North Dade, a FloridaState Bank Institution, Appellees.

Page 358

411 So.2d 358

CENTRAL NATIONAL BANK OF MIAMI, Appellant, v. CENTRAL BANCORP., INC., a Florida corporation, Central Bank and Trust Company,a Florida State Banking Institution, and Central Bank of North Dade, a FloridaState Bank Institution, Appellees.

No. 81-958.

District Court of Appeal of Florida, Third District.

March 30, 1982.

Podhurst, Orseck, Parks, Josefsberg, Eaton, Meadow & Olin and Joel D. Eaton, Miami, for appellant.

Gars, Dixon & Shapiro, Bruce Rogow, Miami, for appellees.

Before NESBITT, FERGUSON and JORGENSON, JJ.

ON REHEARING

FERGUSON, Judge.

Central National Bank of Miami, defendant below, appeals from a final judgment ordering specific performance of an alleged oral agreement with appellee, Central Bancorp, Inc., that appellant would not use the word "Central" in its business name. The oral agreement also provided for compromise of certain debts owed to appellee by appellant and permitted appellant to prematurely terminate a pre-existing agreement between the parties.

As its first point on appeal, appellant claims that the trial court lacks subject-matter jurisdiction because 12 U.S.C.A. § 30 preempted the relief sought by Central Bancorp, Inc., or, alternatively, fundamental error occurred when the trial court entered a final judgment containing terms directly in conflict with the requirements of federal law. Although appellant does not draw the distinction, we understand these alternative arguments to be based on the difference between exclusive federal jurisdiction and federal preemption. The New York district court in Billy Jack for Her, Inc. v. New York Coat, Suit, Dress, Rainwear and Allied Workers' Union, 511 F.Supp. 1180 (S.D.N.Y.1981) provides an excellent discussion of this difference. We borrow from the conclusions of that court as follows. Preemption occurs if state law has been supplanted by substantive federal law so that federal law must be applied to determine the merits of a plaintiff's claim. Preemption is essentially a conflict-of laws question. Exclusive federal jurisdiction occurs when only certain specified federal instrumentalities have jurisdiction to hear the case. Federal preemption, by itself, in no way determines the court in which an action may be brought, but only prescribes the law that is to be applied to the claim. Exclusive federal jurisdiction, by itself, does not govern the applicable law, but only the forum empowered to hear the action. See generally 1A Moore's Federal Practice, § 0.160 at 189 (2d ed. 1981). In the absence of an express directive, the state courts have jurisdiction over federal-question cases concurrently with the federal courts. 13 C. Wright, A. Miller and E. Cooper, Federal Practice & Procedure, § 3527 at 124 (1975).

We find no provision in 12 U.S.C.A. § 30 ¹ or any other section of the National Banking Act-and appellant points us to none-that expressly directs that cases involving name change in a national bank be heard exclusively in the federal courts. Cf. 12 U.S.C.A. § 94 (venue in either federal or state court). The issue, it appears to us, is one of preemption. Compare First National Bank of Aberdeen v. Aberdeen National Bank, 627 F.2d 843 (8th Cir. 1980) (court lacked power to remove to federal court because Section 30 of the National Bank Act did not preempt the common law of unfair competition insofar as it applied to name changes not yet approved by Comptroller) with State of North Dakota v. Merchants National Bank and Trust Co., 634 F.2d 368 (8th Cir. 1980) (Section 30 preempts state fair-competition laws after name change has been approved).

The test for determining whether the federal law has preempted the state law is (a) whether there is actual conflict between the federal and state law, or (b) whether the state law interferes with the purpose for which the National Banks were created or impairs the efficiency of the federal agencies. State of North Dakota v. Merchants National Bank and Trust Co., supra at 378, citing Ray v. Atlantic Richfield Co., 435 U.S. 151, 158, 98 S.Ct. 988, 994, 55 L.Ed.2d 179, 188 (1978). The provision of 12 U.S.C.A. § 30 that any name change of a national bank is to be submitted to the Comptroller of the Currency for approval after recommendation of change by vote of shareholders owning two-thirds of the stock of that association was clearly intended to preempt any state law to the contrary. In order to prevent conflict between 12 U.S.C.A. § 30 and orders of state courts applying the remedy of specific performance, we must review the specific order with respect to these provisions. In this case, the trial court correctly applied the federal law directing appellant to submit proposed names to the Comptroller's office for approval. Appellant also argues that the order of specific performance is invalid as conflicting with the requirement that vote of shareholders owning two-thirds of the stock must vote for name change. We find this argument without merit because (a) the vote required is that of shareholders owning two-thirds of all stock, (b) the record contains evidence that shareholders owning two-thirds of the stock agreed to and intended to change the bank name, therefore, a vote would merely formally record this fact, and (c) the court's directive that, "Within (30) days from the date hereof, Defendant (appellant) shall file all applications, documents, resolutions, etc., necessary for Defendant to obtain formal approval from all appropriate authorities of the proposed name change..." encompasses the required evidence of approval by vote of the name change by shareholders owning two-thirds of the stock.

As the second point on appeal, the appellant claims that Central Bancorp, Inc. failed to prove a prima facie case, or alternatively failed to prove this case by clear, definite and certain evidence entitling them to a decree of specific performance. We find the record evidence with respect to the intent and agreement of the board of directors to a name change, and with respect to the authority of Mr. Revilla to enter the agreement sufficient to support the finding of the trial court that there was a binding oral agreement with Central National Bank of Miami. We also find no error in the granting of specific performance. Evidence was presented to the trial court to prove the existence of the contract, including evidence that on the day after the alleged oral contract was entered, the defendant filed with the Regional Administrator of National Banks an application for a change in corporate title, applying for permission to change appellant's name to American National Bank of Miami, and that after the Comptroller denied approval of this name, the new president of the appellant bank represented to appellees that Central National Bank was going to reapply for a different name, but later decided not to because it would cost too much money. There was also evidence that appellants complied with the alleged agreement by paying appellees the compromised amount of expenses. Appellant contends that it cannot be bound to an oral agreement entered into by its unauthorized agent on a theory of estoppel or ratification because these theories of recovery were neither pled nor argued. We find inapposite the cases relied...